Investors now have their first piece of real corporate news to react to in quite some time: earnings.

Alcoa late Monday kicked off the second-quarter earnings season with better-than-expected results. The news comes at a key point for stocks, as the market enjoys another leg higher in a powerful rally. The Dow Jones industrial average is just 1.2% from its record close after rising 89 points to 15,225 Monday.

Small stocks are at record highs, and the broad Wilshire 5000 index is off to its best first five days for a month since January, rising 2.2%, says Wilshire Associates.

Earnings season gives investors a true pulse of companies' health, a more relevant data point than fretting over what the Federal Reserve may have said or events in faraway lands. "The market likes earnings because it knows how to play it," says Howard Silverblatt of S&P Dow Jones Indices.

Investors will be paying close attention to the earnings reports for signs of how:

• Profits are sizing up relative to expectations. Analysts are calling for 2.9% higher earnings in the second quarter, which would make it the slowest period of growth since earnings rose 2.4% in the third quarter of 2012, says S&P Capital IQ. Adding to the fears is the fact of the 111 companies to preannounce the quarter, 87 have been negative and just 16 positive for a ratio of 5.4. That's more double the typical 2.1 ratio of negative to positive preannouncements.

• Companies are dealing with new headwinds. A rally in the value of the U.S. dollar is turning into a hurdle for the nation's biggest exporters, says Larry McDonald, senior director at market researcher firm Newedge. Additionally, investors will be watching to see how reliant companies have become on low interest rates for earnings growth, since that gain might evaporate with higher interest rates, he says.

• Critical financials are at this point. Investors will be eagerly waiting for Friday's earnings reports from megabanks JPMorgan Chase and Wells Fargo as those companies are the sixth and seventh biggest earnings generators, Silverblatt says. Overall, financials are expected to contribute more to earnings, 18%, than any other sector. Financials will need to make up for weakness in technology, where revenue is expected to fall, Silverblatt says.

Investors may look past a so-so second quarter. After all, even at 2.9% earnings growth, that would still set an all-time record for the number of dollars earned by U.S. companies, Silverblatt says. But there's also the realization investors are expecting stellar 6.2% growth in the third quarter and 11.3% in the fourth quarter. If the second quarter makes that look less likely, investors won't be happy, McDonald says. "The bar was lowered for this quarter, but is still very high for the rest of the year," he says.